The Pensions Mutual CDC proposal – Will Hutton

Posted on March 21, 2026 by henry tapper

Will Hutton – political economist.

Within 12 months British employers will be able to work together to provide pensions for their staff through CDC pension plans

I support Henry Tapper and the founders of Pensions Mutual who will make it easy for employers to provide staff with pension at a fixed cost.

The Pensions Mutual they have created is a multi-stakeholder cooperative society incorporating many of the principles that I hold dear.

Its mutual structure allows it to become majority owned by the employers participating. It gives them input to the management and investment of the scheme and it allows them to benefit from participation as farmers do from dairies.

The aim of CDC is to make pensions simple and cost effective. I am impressed that Pensions Mutual is inclusive of bright professionals who have clarity of what is needed to deliver to the market a CDC product that can be authorised in 2026 and available to employers early in 2027.

The CDC scheme they are planning has already promises from employers of assets from transfers and future contributions and I have no doubt that an open pension that can neither be in deficit or surplus will be able to invest for the long term in real assets in the UK and abroad.

From an economic point of view, Pensions Mutual is a way to deliver what pensions have been missing this century, a clear sense of purpose.

I am impressed by their wish to embrace new technology to deliver service to employers and their staff to the standards now expected. They talk of a new way of working since AI has become available. As a new enterprise they are well placed to benefit from the opportunity.

So I see this venture as worthy of your attention and investment. That investment can be of your time and expertise, your defined contributions into pensions or the investment of your capital. It may be that you want to invest in all these ways.

I hope that you can move forward with Pensions Mutual in 2026 and that in 2027 and beyond, you will be part of its operations

 

Will Hutton

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“Well said Maggie!” An elderly trustee chair speaks out for Maggie Rodger, the AMNT and independence

Posted on March 20, 2026 by henry tapper

PensionsOldie has spoken out in a comment to my blog on trustees being for members not just compliance

The reference to Maggie’s Farm does not refer to Maggie Rodger but to the rubbish workplace that Bob Dylan imagines himself in because there is no one standing up for him!

We can all feel that way when it comes to our pensions and I hope that that will change when Mutuals return and they are run by trustees that are  enthusiastic about what they do.

Well, I try my best to be just like I am
But everybody wants you to be just like them
They say, “Sing while you slave,” and I just get bored

Pension Oldie’s comment

When I first became a Secretary to a Trustee Board in the mid 1980s I was advised that the first key duty of a Trustee was to act in the interest of members, the second key duty was to question and challenge their advisors and not just to rubber stamp advice.  These messages appear to have been lost over the following decades and replaced with a group think mentality and regulations that have embedded a belief that consideration of members’ interests must be solely determined by an analysis of risks.

I strongly belief that it was this false risk dominated approach that has resulted in many DB pensions schemes giving away a third of their assets by adopting an LDI investment policy or buying bulk purchase annuities based on a negative real gilt yield.  What was the real downside risk which these arrangements were promoted as protecting against; when the pricing was based on the assumption that the scheme would if continuing without the LDI or buy-out “protection” would have real investment losses (at say 2% p.a.) in every future year?  Similarly is it currently in the Members’ interest in a scheme in surplus to pay the insurance company premium to buy out liabilities at little more than PPF level benefits?

In Mastertrust DC and CDC do we have, or will have, Trustees who will have the courage of their convictions to sack the asset manager, scheme provider or owner, if they believe it is the members’ interest to do so?

We do need trustees, in both DB, DC, and CDC schemes who are not conditioned by training or experience in the status quo and a fear of deviating from the norm.  Member nominated Trustees are an important protection but we must ensure that Trustee boards are not dominated by those whose training and experience limits their perspective.

Although I have relevant profession qualifications, am paid in the role, and have decades of pension trustee board experience, I refuse to categorise myself as a “professional” trustee.

You can see all comments on this post here:
https://henrytapper.com/2026/03/19/trustees-are-for-members-not-just-compliance/#comments

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So you think that your pension was bought out by a gilt-edged insurer?

Posted on March 20, 2026 by henry tapper

All year I have been writing about the security of buy-ins and buy-outs of occupational pensions in the UK by insurers. I am talking in particular about our insurers that are shipping off assets and liabilities to the USA and Bermuda so that the liability to pay us is swapped from UK regulated funds (backed by the PPF) to what the FT is now calling the “Private Credit Binge” of top rated bonds. These top rated bonds are yielding such large amounts that insurers do not need to hold so many of them as they’d have to hold UK corporate bonds and gilts.

To understand the explosion of these new kind of bonds, the ones that back the bulk annuities that pay us like a pension, here’s a chart from the  FT article that I can offer on a free link here.

 

I am out of my depth on fully understanding the mechanics of turning a safe fund into a holding of these “Rated feeders”, but here’s the FT explanation

Let’s begin at the beginning

It’s that last paragraph that has made these rated feeders and CFOs help American insurers clean up buying into and buying out UK pensions. But that’s where we should be concerned. Our pensions are easy meat for US private equity

But “easy” doesn’t mean secure and the names of the big private equity firms who now own insurers such as Just are listed below.

You think you are out of trouble when being bought out by an insurer?

This whole business of rating the value of debt is based on “track record” of the debt managers and it’s worse than that.

So there you are. Our bought out pension money’s being held by insurance companies that really have no idea what’s going on.  Call that “gilt edged”?

 

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I can’t breathe at the “fiduciary” summit – I find the air’s too thin up there.

Posted on March 20, 2026 by henry tapper

Lords strips mandation from Pension Schemes Bill

Infamously, last Thursday, as my friend Tom was being lauded by the shadow SOS, I suggested to the not very crowded meeting in Edinburgh a repeat of David Cameron’s trick with Ros Altmann.

Ros had been made a baroness  and installed into the House of Lords so she could be Pensions Minister for the Government.

I suggested that Helen Whately suggested Tom McPhail be promoted to be a peer and be an unelected pension spokesperson for the Conservative party.

I will not call the Conservatives the opposition as there are several of them but the Tories have found an opportunistic way to get popular with the ABI, Pensions UK , IFS , Steve Webb and especially Tom McPhail.

The Tories pretend  trustee investment of pension funds is impeccable. For them and their high minded friends , mandation is giving the Government a right to pollute fiduciary air  by letting rip a loud and smelly fart. That’s nonsense.

I am delighted to find that this nonsense from the great and good is not making it to the top of the Corporate Adviser’s pops. A rather more pragmatic approach to getting ordinary people up to 60% better pensions is #1.

The lower house may find the whole argument about mandation too boring for them and give the Lords its amendment but I think that unlikely and so does another former Pensions Minister who sounds a little more realistic than the rest of the opposition.

Either way  will make very little difference to most of us  that do not breathe the thin fiduciary air that we pretend’s for them.

Pensions for ordinary people are the payments they spend to go on holiday or buy their groceries. Ordinary people have no regard for the niceties of fiduciary duties.  They want value from the portion of their pay they and their bosses put away for later.

 

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TAS300: “Particularly Delightful Memory” says DWP Minister of State.

Posted on March 20, 2026 by henry tapper

William McGrath has done a great deal to promote TAS300 to help trustees and employers get it right at the point of deciding how a DB scheme proceeds

Regulatory coordination to follow to boost “informed decision making”

The case for maths based run-on v bulk transfer comparisons ahead of strategies being set for DB pension schemes was debated in the House of Lords for the third time on Monday.  Debate extracts attached.

The Baroness Altmann Amendments – strongly backed by knowledgeable members – have been effective.  They can be addressed through coordination between the numerous relevant Regulators and by trustees ensuring they make the fully informed decisions expected of them.

Baroness Sherlock, Minister of State responding for the Government, said during the House of Lords debate:

“The noble Baroness, Lady Altmann, is right to home in on the underpinning goal of these amendments. We want to make sure that trustees continue to take advice on the potential options for their schemes and keep the scheme’s strategy under regular review.

To ensure this, we will continue to work with TPR as it reviews and updates its guidance. We will also engage bodies such as the FCA and, where appropriate, the PRA and the FRC, to ensure alignment across all guidance relating to consideration of alternative options.”

Expect TPR to step up.  TAS300V2.1 (from Financial Reporting Council, the forgotten regulator of actuarial work) has to date been ignored by TPR in its annual Funding Statements, the Funding Code and in Funding and Investment Strategy regulations.  Informed decisions require a realistic, calculated assessment of what is at risk for members and what the inflation protection and value share upsides can be.

Pre-1997 service being covered by PPF and one-off payments being Authorised change the calculations.

Actuarial work has long been subject to very little scrutiny.  Some regulatory coordination through a revised Joint Forum on Actuarial Regulation could go a long way.

C-Suite with its partners have modelling tools and analyses to support informed decision making.

Terrific work by Baroness Altmann.

 

Here is the debate

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Pensions Mutual is looking for trustees for its CDC scheme

Posted on March 19, 2026 by henry tapper

We Are Looking for Trustees

As we move forward with the establishment of the Pensions Mutual Unconnected Multi-Employer CDC scheme we are looking for trustees to sit on the scheme Board.  We are particularly keen to appoint individuals who have experience of the Pension Regulator’s MasterTrust authorisation process and/or practical experience of working with CDC.

Candidates are invited to express their interest and share details of their relevant experience by emailing the scheme CEO at stella@pensionsmutual.co.uk before 2nd April  2026.

http://www.pensionsmutual.co.uk

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People need more pension, not just moaning about the lack of saving!

Posted on March 19, 2026 by henry tapper

I enjoyed Richard Smith’s post on L&G’s moan about not getting enough paid into workplace pensions

We know only too well that enough money is going into pension pots. Last Friday I listened to a friend telling the few delegates who stayed on to hear him, we need to make pensions a more attractive proposition to the folk who one day will get a pension from them.

I suspect that people who pay into a “pension” will expect a “pension”. Richard and Rory are as one in suggesting we could do better for the people we serve by making the prospect of a pension a little more attractive to the people we serve.

So this Government has decided to put bigger pensions before more contributions and if I was the FD of a major company paying contributions into a workplace pension, the news that the pension that I’d be giving could go up by up to 60% without me having to pay more contributions, I’d be more interested.

If I was younger , I would be looking for value for my money , before investing money into a pension plan the fruits of which would be decades away.

People will use pension boards and find the visit like a visit to the dentist. Richard takes us through that journey in another gem where he reminds us of the pain of the visit, discovering the prospects for the future , the satisfaction of at least engaging with the problem and the worry of the cost of putting things right (for teeth read retirement income).

Let’s finish where we started, with another Richard Smith gem. The bad news coming this time from Standard Life rather than L&G. I hope that both are considering how to improve the pensions from the pots they are helping us build up. It is the pension and not the pot that we’ll be confronted by when going to the dentist …sorry – pension dashboard.

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I hope professional trustees will come to CDC independently

Posted on March 19, 2026 by henry tapper

I was surprised to see  a firm of professional trustees promoting itself with  WTW , who are consultants but also providers of DC services through LifeSight .

I have heard WTW present CDC as an extension of Lifesight , with CDC being available at Retirement (but not before). Most recently I attended an advertorial for itself at Pensions UK’s investment conference.

We do not yet know how Retirement CDC of this type, will emerge and when it will be available so it is odd that it is being promoted to trustees at this early stage. I asked the question of Torsten Bell, will we be getting Retirement CDC draft legislation this year and Torsten Bell told me and 1500 in the hall, we will. I am pleased for CDC and WTW and Lifesight. But it is odd that WTW are so forward in promoting Retirement CDC.

It is also odd that HS Trustees are promoting themselves by being photographed from the top floor of WTW’s City offices in Lime Street (the insurance end of the City).

My hope is that HS Trustees will focus today on what is legislated for today and for which in a couple of months we will have a CDC code.

Both the DWP and TPR have made it clear that trustees should not promote one CDC scheme over another but must stick to the job that trustees have, of making sure that members are treated fairly and that they get the value from their money they’ve put by.

It is important that CDC does not become conflicted. WTW’s potential conflict is that they both advise and provide a DC master trust and much as I like Simon Eagle and Keith McNally and other senior WTW employees who work on CDC, I am aware that the Retirement CDC they hope to use as the default pension for Lifesight  members reaching retirement.

There are other consultants who are not conflicted and who can offer trustees a view of the market that includes whole of life CDC schemes. They may not have the money to throw at trustees in the way that WTW appear to have. But I suspect that it is better governance, a Trustee whether professional or member or employer nominated, to get your information from Government or at least advisers who are unconflicted.

If I was HS Trustees, I would not be posting their photographs in this way, if I was WTW, I would be very careful not to breach the conflict of interest between making money as an adviser and making it as a provider of DC (and at some stage CDC) services.

 

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Is America a good place for insured retirement funds from Britain?

Posted on March 19, 2026 by henry tapper

I am pleased to see Calum Kapoor and Mary McDougall working together on an article that looks at the taxation of overseas money invested in American assets. You can read it on a “free share” here.

I profess to be unaware of some of the nuances of the concerns but that two pension stalwarts are writing this article, suggests that the transfer of money that was in DB pensions across the pond to American private equity firms (fronted by UK insurers) is a dangerous practice.

The US Treasury may have moved to reassure some of the country’s biggest foreign investors over a shake-up of tax rules after top sovereign wealth funds warned they could cut their exposure to America if it pressed ahead.

That’s fine if we still had the chance to choose where our pension fund money is invested, but many pensioners have no representation by trustees and only an insurance company to look to for their pension investments.

Under Section 892 of the US tax code, foreign governments and their controlled entities — a category that includes SWFs and some public pension funds — do not pay US tax on what the IRS categorises as investment activity. The Treasury said in response that it was “considering all options” for the proposed regulations, which it had issued “due to requests for certainty from the industry”, the spokesperson added.

I cannot think of any western country that I would trust on tax (including tariffs) than America.

It is time that we thought seriously about the impact of American companies owning British insurance companies and investing money for British companies in America. I will finish how Calum and Mary finish

The proposed regulations come after Section 899 in last year’s “big beautiful bill” threatened to increase taxes on dividends and interest on US stocks and some corporate bonds for foreign investors.

Babak Nikravesh, a partner at law firm Greenberg Traurig who advises a number of sovereign wealth funds, told the FT his clients had been “really concerned” about how hospitable the US would remain and would “have a hard think” when it comes to deploying new cash.

We have the PRA, the BOE and ultimately His Majesty’s Treasury looking out for the safety of those in insurance arrangements. This includes those in retail and bulk annuities.

I hope that the Government’s financial organisations are considering our “wealth” whether “sovereign” or “insured“.

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Trustees are for members , not just compliance

Posted on March 19, 2026 by henry tapper

Maggie Roger has written a sensible article that explains why member nominated trustees are essential to good governance.

Increasingly we are seeing professional trustees taking not just the lead role but the only role as trustees. The view that schemes are professional because of their exclusively offer trustees is indeed faulty. I fear too often it is part of what is wrongfully called “de-risking” and is a means of placing compliance as the principle function of trustees.

Maggie Rodger has been a strong advocate of CDC and has spared me time whenever I have met me to explain the work she has been doing with the Church of England CDC scheme. She takes the responsibility of trustees not to market the scheme they are involved in seriously, so this work does not appear in her article but I can say (not as a trustee) that her and the  involvement of the Association of Member Trustees in the selection of trustees, says good things about the CoE CDC scheme to come.

Maggie looks back to Royal Mail

The introduction of member trustees brought an insight into wider member views as well as governance balance. Member-nominated trustees (MNTs) have given confidence to members that their scheme is being run in their interests.

This was demonstrated recently when the Royal Mail member trustees were instrumental in helping their members understand and accept collective defined contribution (CDC).

I will not be shy in saying that CDC can take a step forward from common practice today of DB schemes in wind-up and commercial DC master trusts. CDC scheme can and (I hope) will have representatives not just of employers but of members on extended boards. The Pensions Regulator calls for a minimum of three trustees on a  CDC Trustee Board but I think there is space for more at the table.

I absolutely agree with Maggie Roger when she says

New pension models, such as CDC, will rely for their success on good governance to ensure generational fairness in the design, annual valuation and balancing decisions. Value for money proposals in defined contribution (DC) stop short at the non- numerical concepts of stewardship and service quality. Since these DC models place all the risk on members, either individually, or shared, surely they should be involved in governance of these issues?

The work of the AMNT has been taken up by the TUC in there recent paper and campaign for more representation for members

You can download this paper here.

It is worth reading alongside Maggie’s Professional Pensions article which you can access from here.

There is of course a place for the professional trustee and all trustees including member trustees should be qualified to do their job.  But to suppose that trusteeship starts and ends with compliance with codes is to forget who pension schemes are working for!

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